Major Ligand Pharmaceuticals' shareholder Knott Partners Management yesterday stepped up the pressure on the beleaguered company to shake up its board of directors, saying it would support a dissident slate of board nominees over the existing board.

David Knott, who controls 9.7 percent of Ligand's stock through his New York investment firm, said in a regulatory filing that he has urged the San Diego specialty drug company to avoid a proxy fight by coming to an "amicable agreement" with activist Ligand shareholder Third Point.

Investor Daniel Loeb, who owns 9.9 percent of Ligand through New York hedge fund Third Point, moved last month to mount a proxy fight for control of Ligand after he failed to persuade the company to appoint him and two Third Point colleagues to the board.

By filing a lawsuit that was settled last month, Loeb also forced the company to set a Jan. 31 date for its overdue annual shareholders' meeting. Loeb said he intends to run a rival slate of board nominees at the meeting to replace the existing eight-person Ligand board.

Loeb maintains that Ligand is undervalued because of mismanagement and accounting problems that prompted an ongoing federal investigation and the company's delisting from the Nasdaq stock exchange.

Loeb wants Ligand's board to consider selling the company or take other measures to boost the share price.

Knott, the managing member of Knott Partners, said he hasn't committed to any course of action and would maintain an open mind as events unfold, according to a filing with the U.S. Securities and Exchange Commission.

But Knott also said he told Ligand CEO David Robinson and Ligand CFO Paul Maier during a Nov. 22 meeting that, "if forced to choose," he would back Third Point and its dissident slate of nominees over the existing board.

Ligand last month filed a massive financial restatement for 2002, 2003, and most of 2004. It has yet to file any financial statements for 2005. The company acknowledged numerous failures to "maintain internal control over financial reporting" and promised to fix the problem.

Ligand announced at the time that it would explore "all options" to boost its stock price, including a sale of the company. The company employs 450 in San Diego and another 100 outside the county. Penni Crabtree: (619) 293-1237; penni.crabtree@uniontrib.com